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Daily Technical View on Nifty

Market: Observation

• Markets ended marginally lower on Thursday after the Nifty was unable to sustain at the highs of the day. The Nifty finally lost 17.6 points or 0.1% to close at 17,304.6. Broad market indices like the BSE Mid Cap and Small Cap indices lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: 15 min chart indicates a lower top

• Zooming into 15 minute chart, we see that Nifty opened on a positive note and witnessed a mild correction before recovering smartly from the lows. Selling once again emerged from a lower high in the afternoon session and pulled the index into negative territory.

• Thus, while the index remains in a short term uptrend, it has made a lower intra day top and closed below the 20 and 50 period MA on the 15 min charts. The index could now correct further towards the 17100 levels once the immediate support of 17235 is broken.

Nifty: Daily chart shows index could consolidate

• With Nifty bouncing back sharply on Tuesday and filling the down gap created on Monday, the bulls do seem to have an upper hand. The last two session’s losses seem more like a consolidation after a sharp upmove.

• The bulls could gain more control once the Nifty closes above the 20 and 50 day SMA which is currently at 17377 and 17466 respectively. On the downside, the current short term uptrend would reverse with a close under 16809.

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